Mutual Funds Raise ₹1.18 Trillion via NFOs in 2024: Thematic Funds Dominate

According to a report, asset management companies (AMCs) launched 239 new fund offerings (NFOs) in 2024, collecting ₹1.18 trillion. Sectoral and thematic equity funds emerged as investor favourites.

NFO Growth Over the Years

The NFO market has grown significantly in recent years. In comparison:

• 2024: 239 NFOs raised ₹1.18 trillion.
• 2023: 212 NFOs collected ₹63,854 crore.
• 2022: 228 NFOs garnered ₹62,187 crore.

The market’s rise since 2020, when only 81 NFOs raised ₹53,703 crore, reflects strong growth and increasing investor confidence.

Market Sentiment Fuels Growth

NFOs typically gain traction during bullish markets when investor sentiment is high. In 2024, a strong stock market performance played a key role, with the Sensex gaining 8.16% (5,898.75 points) and the Nifty rising 8.80% (1,913.4 points).

Thematic and Sectoral Funds Lead

Sectoral and thematic equity funds captured the most attention in 2024:

• 53 NFOs raised ₹79,109 crore, driven by their focused approach to sectors like manufacturing, technology, and ESG (Environmental, Social, and Governance).
• The HDFC Manufacturing Fund NFO recorded the highest inflow, raising ₹12,500 crore in April 2024.

December: Peak NFO Activity

The highest number of NFO launches occurred in December 2024, highlighting strong year-end momentum.

Outlook for 2025: A Balanced Approach

The report suggests the mutual fund industry may recalibrate in 2025, shifting focus to stability and liquidity. While extraordinary returns may taper off, a balanced investment approach will help manage risks and maintain steady performance.

Key Takeaway

Thematic and sectoral funds led the charge in 2024’s NFO boom, but investors should prepare for a more stable and cautious market in 2025.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.